Friday, December 28, 2012

Daily Market Trend Guide -- Friday, December 2012

MARKET TREND FOR TODAY                                                             December 28, 2012
The Markets had a session typically dominated with heavy rollover centric activities as it opened flat, spent most of the session in a very narrow range and then lost some ground towards the end to end the day with modest losses. The Markets opened on a mildly positive note and then traded positive in the first half of the session as it gave its intraday high of 5930.80 in the very early moments of the trade. The Markets then  gradually drifted into the negative territory but still continued to trade with very capped losses. However, it was in the last hour of the trade that the Markets saw some bout of weakness as  it drifted lower to give the day’s low of 5864.70. The Markets hovered around those levels to finally end the day at 5870.10, posting a net modest loss of 35.50 points or 0.60% as it still formed a slightly higher top and higher bottom on the Daily High Low Charts.

Precisely on expected lines, the levels of 5930-5940 have acted as crucial resistance again as the Markets did not move past them yesterday. Today, expect the Markets to open on a flat to mildly positive note again and look for directions. The intraday trajectory continues to remain critical as the Markets continue to remain in the broad trading range that it has been trading in.

Today, the levels of 5940 shall continue to remain the key resistance levels for today. The supports come in at 5820 and 5775 levels.

As we have been mentioning in the previous editions of the Daily Market Trend Guide, the lead indicators continue to remain neutral to mildly bearish. The RSI—Relative Strength Index on the Daily Chart is 54.9366 and it is neutral as it shows no bullish or  bearish divergence or any failure swings. The Daily MACD is bearish as it continues to trade below its signal line.

On the derivative front, the statistics are mildly bullish. The NIFTY rollover has been little above average and better than the previous month and the NIFTY PCR has begun the new series with 0.88, which is much better.

Having said this, the pattern analysis  of the Markets clearly continue to show the Markets trading in a broad range and fresh sustainable upward breakout shall occur only after the Markets moves past the levels of 5940-5950. Until this happens, we will continue to see the Markets trading in the broad trading range of 5820-5940 with some degree of volatility ingrained in it.

All and all, keeping this in mind, it is advised to continue to approach the Markets in a cautious and with a stock specific  approach and should also continue to protect profits vigilantly. While avoiding shorts, very selective purchases may be made. Overall, mildly positive, but cautious outlook is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331

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